and we have Sebastian Mitchell here, who is my son, who- Hey, Carey. was part of the fireside chat questions practice session at home. So, he had some answers for profitability, Carey, that you might not appreciate or Matt might not appreciate. We look forward to the hope. He wants to hear the real answers. But he's super fascinated by your business, and I think investors are as well, given the interest in the stock, and the performance has been quite spectacular, so if folks don't know the Parsons story yet, they're getting to know it really well pretty soon, so if you could kind of talk about what helps Parsons succeed, that could be a great starting point. Yeah. Well, thanks, Sheila, and thanks for Jefferies for hosting this conference. It's great, as always. So just a little bit of background on the company today and what helps us succeed. We're currently reporting in two segments. We have 58% in our federal solutions segment, 42% our critical infrastructure segment. We have 18,500 employees that are based worldwide in over 25 countries around the world, all 50 states. Within our federal business, we are focused on outpacing near-peer threats, so we specifically focus on areas like cyber, intelligence, space, missile defense, and electronic warfare. Within our critical infrastructure business, we're focused in markets such as transportation, environmental remediation, and urban development. I would say what I'm most excited about is our last five quarters of greater than 20% organic growth. This has really been driven by all four of our business units hitting on all cylinders, so every single business unit has been double-digit growth. In addition, we're in terrific end markets. When I talk about the six end markets that we're in, those all have between 5% to 12% compound annual growth over the next three years. Finally, if you look at our long-term visibility, it's very strong. So this year, we have less than 3% of our business that's up for repeat. Next year, we have less than 10% of our business that's up for repeat. Our backlog is $8.8 billion, and of that, 62% is funded backlog, which is very strong among the peers. Also, we have a $57 billion pipeline. This is one of the largest pipelines in Parsons' history, and within that pipeline, we have over 121 jobs that are greater than $100 million. So I would say, bottom line, what's made us successful, it's having the right team leading the business. It's having the right strategy being executed at the right time, where demand is high in both our federal market as well as our critical infrastructure market. And if you can't keep up with Carey's numbers, Connor's gonna have a note right after this presentation, so don't worry. But organic growth has been 25% plus over the last four quarters, and I think the question to ask is not, is it gonna go down, but how much can it continue at this pace right after you set the 4% to 6% growth target. Maybe if you could talk about the underlying growth in your business and what you think Parsons could grow from here. Yeah, so first I'd say we're very pleased again with the strong organic growth, and it's really a tribute to the team delivering on the strategy and being in the right end markets at the right time. As we look forward, we're gonna continue to execute and as I talk about some of the markets that we're in, again, strong compound annual growth rates, and our goal is really to continue to outpace those market CAGRs. I'd say we have the right business development team. We've put the right investment in, both organic investment into critical market areas, such as artificial intelligence, as well as our M&A strategy, which has made us successful. As we do more acquisitions, and we've been on a pace to do two to three per year, we continue to move up that solutions and integration value chain, bid and win more jobs. Looking forward, I'd say win rates were very high. We're at 76% win rate. Perhaps when we gave the initial long-term guidance, you know, we were planning more around a 40% win rate, and I would say our hiring and retention's been very strong to be able to enable that type of organic growth. Great, and maybe we'll delve into those six end markets, if you don't mind. So first, starting with cyber and intelligence, it's a $13.5 billion market, growing 5%-6%. A lot of this is classified, but maybe if you could talk about your strategy here on the defensive cyber capabilities and how Parsons thinks about the growth in cyber. Sure, so I would say in cyber, our addressable market is 8%-10% compound annual growth rate. What we've achieved through the first half of the year is 27% growth. This is now approaching a $1 billion business as we go into this year. I'm personally very excited about that. When I joined the company back in November 2016, we only had one cyber contract to... So now to be able to say we're approaching $1 billion, we're very pleased with that. It's quite a fascinating market, as everybody knows. We're involved in areas like platforms. A good example is there is we produce a platform that's called the Enhanced Network Visualization Environment. It's an enabling capability to basically perform reconnaissance on any network for Department of Defense and the intel community. We also develop tools. A good example there is our high-speed packet processing tool that we deliver for the intelligence community. Another thing that I would highlight in the cyber market that's very recent is our acquisition of BlackSignal. BlackSignal is very complementary with Parsons' capability in cyber. They bring research and development, whereas we're heavier on the operations. So when you look at the capability, you now have end-to-end, full-spectrum cyber capabilities. In addition, BlackSignal plays with different customers than what Parsons does. They are heavier with the Air Force as their number one-... They have a lot of work with the Navy, as well as DARPA, and parts of the intelligence community. Whereas with Parsons, our number one is Army. We also have work with the Air Force and parts of the intelligence community, so it basically fits together very well. An exciting capability that will enhance and continue to help us grow in cyber. I look at cyber in three areas: offensive is your toughest problem to do, 75% of our business is there, defensive is your middle layer, 25% of our business is there, and then the bottom layer is infrastructure and services, and we really don't play in that area. Moving on to critical infrastructure protection, I think it's a $27 billion market, 7%-9% CAGR. These numbers might be wrong 'cause you're blowing through these growth rates. So another hot topic is grid security and investment being made along border security. What role does Parsons play in critical infrastructure protection? Yeah, so your numbers are accurate. So it is 27% of Parsons' revenue, and we expect around a 6%-7% growth rate in the critical infrastructure area. So within critical infrastructure protection, our largest customer would be the Department of State, where we're servicing 285 embassies and consulates all over the world. Some of the products that we provide are electronic security systems. We're number one with the Department of State, we're also number one with the Army, and we're number three with the Air Force. So you can think about physical protection, physical security, access control type of capabilities. We also do counter-unmanned aircraft systems, where we provide system-to-system capability to identify, detect, track, and defeat an unmanned aerial vehicle, and that could be everything from a group one, which is a small handheld vehicle, up to a group five, a Predator-type of system. We're providing that capability for the Department of State, as well as the Air Force and some intelligence community customers as well. So this is an area that's had robust growth. We anticipate additional growth, and one of the areas that I would say we're pleased to be top of the market. Untapped potential within critical infrastructure protection is kind of where the synergies come in between our federal and our critical infrastructure business. If you think about water systems getting attacked, or utility systems getting attacked, or a transportation system, these all have sensors, they all have data, they're all threats for cybersecurity. Parsons has domain knowledge from our Critical Infrastructure side of our house in those market areas, but we're also the only company that can come in and protect those markets from a cyber and a physical security perspective. Got it, and then maybe if we could talk about transportation market. Pretty self-explanatory there. What's your growth rate? How do you think about your TAM? And obviously, we've seen infrastructure bills in North America, across the U.S. and Canada. How much of that money has been allocated out? Yeah, so, with transportation, that represents about 19% of Parsons' revenue. We're involved in several areas. We're a world leader in bridges. We've designed and built over 4,500 bridges. We're involved in airport projects. We've done over 400 airport projects, rail and transit, over 450 projects around the world, and designed and built over 17,000 miles of road and highway across six continents, so it's a big focus area for us. The compound annual growth rate for the transportation market is 10%-12%. I would like to highlight in this area, some excitement that we've had since the end of Q2, which we've publicly announced, which are three terrific wins, the biggest in Parsons' history now as a design subcontractor. We were just awarded in Hawaii, the rail and transit extension. It's gonna be a 1.6-mile segment that will be added, and it'll connect to the civic center from the downtown area. We were awarded in California the Inglewood Transit Connector. That's what's needed for the Olympics because it's basically gonna connect Inglewood to many of the stadiums, such as the SoFi and the Kia Stadium, a very important project. And then finally, we were just awarded the State Route 400 project in Atlanta, Georgia, where we're gonna be putting in some express lanes. So this follows three significant wins that we had a prior year, but again, these are some of the biggest projects we've seen in Parsons' history. I would also mention that we don't just do transportation within the U.S., we also do transportation systems in Canada. We were recently awarded the Metrolinx project around the Greater Toronto region, and we're involved in transportation within Saudi Arabia. Some of the jobs we've performed there were the Dubai Metro system, which was the world's largest metro system at the time it was built. Also, we were involved in all the traffic management for the World Cup in Qatar, and we were involved in the Dubai Expo. So these capabilities that we're looking forward to applying in the United States, as the United States starts to host, and Mexico and Canada, the upcoming World Cup events, and for Saudi Arabia. So we have to look to Parsons for stadium tickets, concert tickets at SoFi and World Cup- I'm gonna get your son Sebastian some. There you go. So in terms of just those three contracts you mentioned, quite big values, how do we think about the revenue trajectory of those, if you're allowed to disclose them? Yeah, so generally, I would say, because we are a design subcontractor, most of our work is upfront, so it'll range over about a three-to-five-year period. Okay. Next up is environmental remediation, and we've been bothering Dave Spille about your PFAS opportunities and such. So maybe if you could talk... I'm pretty fascinated by it. You have large mine reclamation projects there. Can you talk about how you think about the environmental remediation market? Yeah, so environmental remediation, we're involved in mine reclamation, two of the world's largest abandoned mines up in Canada, the Faro Mine and Giant Mine, and we've won those repeats for the next 12-20 years. We also are involved in oil plugging and abandonment, so if you have an abandoned oil well, we've developed a filter that basically prevents methane leakage from those oil wells. And then PFOS, PFAS, perhaps the most exciting part of that market, where we're looking at a total market of about $220 billion, about $40 billion of that being addressable for Parsons. We've had a research and development laboratory for over three decades up in Syracuse, New York, where we've developed some exciting advanced destructive technologies. The most recent one is called our Hot-ISCO technology, so it basically has the capability to destroy on the spot, PFAS. Whereas other technologies will take your PFAS molecule, and they break it up into smaller molecules, our technology actually destroys it on the spot. We've done 2,000 investigations for PFAS. We've done 7,000 point-of-use treatment systems. We've designed, built, and operated four large PFAS treatment plants for industrial clients. So again, very exciting area where Parsons plans to address the full life cycle of PFAS. How do we think about your current revenues from that market today? Yeah, so today it's less than $100 million, so we see significant opportunity there for the future. That market's expected to peak in about the 2032 timeframe. And I'm saving all the Middle East commentary for your urban development business. I think it's a $1 billion business in the Middle East today. Maybe if you could talk about the major growth drivers. It's been in the news in terms of the projects, whether it's NEOM or Oxagon. If you could talk about the progress on those programs. Yeah, so we've been in the Middle East for six decades. We've been in Saudi Arabia five decades. We have 50/50 joint venture partner with a Saudi firm, so we're really seen as a Saudi company. I would say we're probably the best-branded program manager within the Middle East today, have extremely high win rates based on our reputation of being able to deliver. So nearly every large project going on in Saudi Arabia, Parsons has a footprint in. We're one of the integrated delivery partners for NEOM The Line. We are the program manager for NEOM Oxagon. We're one of the integrated delivery partners for Qiddiya, which is gonna be the world's largest entertainment city being built outside Riyadh. We were just awarded AlUla, a brand-new resort that's gonna be in the southern part of Saudi Arabia. We won the Riyadh Rings and Roads contract that's focused around Riyadh. We're also involved in Diriyah Gate, helping to restore Saudi Arabia's history. So as we look forward to Saudi Vision 2030, and in the Middle East, $1.5 trillion of spend, half of that going into Saudi Arabia, very well-positioned. Also well-positioned in the UAE and Qatar. Maybe the last of your end markets, space and missile defense, this was also, in addition to cyber, one of the markets that was nonexistent when you first joined, I believe. Can you size how much of your revenues are from space and missile defense? And I think it's actually your slowest grower but still growing steadily. How you think about that growth and where you've invested, whether it's satellite-as-a-service or missile defense? Yeah, so within space and missile defense, that comprise about 11% of Parsons' revenue, and what we do there, first, I'll start on the missile defense side. So that's a contract that we've had for over four decades. We support the Missile Defense Agency as system engineer and integrator involved in every aspect of what goes on in MDA's mission. If I move over to the space side of the house, this was a business, as you mentioned, that did not exist in November 2016. We got in very selective areas there, and we got into space domain awareness, where we were providing space domain awareness for Department of Defense and the intel community, and then we just were awarded the TraCSS contract, which is gonna be the civil mission that's under Department of Commerce. That also has some international potential as we start to look at rules of the road of, with our allies across the world. We do space launch, and so we got involved very early on in launching small satellite systems, as we try and put a disaggregated architecture up into space to prevent any single-point failures. We've been involved in over 170 ground system contracts, supporting customers from commercial to civil to the intel community. Satellite service, I'll hit on for a minute. We've come up with some disruptive business models. Great example of satellite service where we buy the infrastructure, we buy the antennas, and we have the government coming in and buying time from us. It's a win-win model. They don't have to spend to purchase the infrastructure, and for us, we only purchase it once, and so then it helps to be margin accretive. What are the main budget areas where you look at for growth for space and missile defense? Yes, I would say across our whole company within federal, it's really the RDT&E area. We play on our customers' emerging missions, so we're always focused on how do we solve their problems of tomorrow. We're not a company that goes after other companies' repeats, but it's rather knowing where our customers are headed. What are their most critical, most complex problems that we can help to resolve? We talked about what's driven your growth rates above expectations. How do you think about... Maybe can you talk about your growth win rate again? Was it above 70% or 40%? I forget which one you mentioned earlier. Yes. Our win rate in the first half of this year is 76%. That's comprised of 70% on new business and close to 100% on repeat through the Q2. What do you think drives such above-industry growth rates? Is it your pricing? Is it your bid strategy? Is it work on prior programs? Yeah, so on both federal and Critical Infrastructure, it's really driven by technical capabilities. We do not try not to get into cost competition, so it's really, how are we the number one technical provider? Because we're solving emerging problems on both federal and Critical Infrastructure, it's always leaning forward, where customers are looking for something that has never been done before, and solutions kind of with a clean sheet of paper approach. I think we have a very strong team. I think we're in very strong markets. We've increased our business development capacity, and then I would say with customers, I call it a land and expand strategy. So when we get with a customer, we have the ability to land. We win the work. We show that we can deliver. We show that we can execute. We drive on contract growth. We're able to expand into other areas. We don't often like to look at backlog as a lead indicator, which I know sounds ironic, but with Parsons, we do because I think your booking protocol is very strict. When we think about your $13 billion of unbooked value, $6 billion of awards awaiting notice, and the pipeline of $57 billion, how do we think about that conversion over the next few years? Yeah, and we'll get Matt to talk in here for a few- Yeah, there you go. Yeah, so to Sheila's point, you know, we have just under $9 billion worth of backlog, which is your traditional bookings and what drove book-to-bill, and then we have a $13 billion awarded to Parsons, but that has not flowed into our backlog yet. The reason is that's future contracts, you know, whether it's... you know, the, it is, Parsons is the, it's sole source to Parsons, but in some cases, it's option years, so as we get to whether you meet a schedule timeline or you meet the ceiling. So it's really an opportunity for us to drive work to the vehicles and achieve the option period. So that work is... you know, from a periods perspective, that's 100% probability that that will come to Parsons. That makes up about 50% of the $13 billion, and then the rest is on us to bring work to the vehicles. But we have, you know, 80+% success on bringing work to those vehicles on the ones that we've won in the past. So over the next five years, Sheila, I think 50% will flow through over the next three, so we're feeling really good about that. So 50% of that $13 billion will flow through? Yeah. And the change from the $14 billion you had prior was that it moved into actual backlog? Yeah, so you heard Carey talk about the TEAMS contract. That's the MDA job that we had. So we met an option year period, so $400-plus million dollars flowed into backlog, and so kinda just rounding went down. It looks like a billion dollars, but it came down to about $600 million. And as we think about your revenue growth, what's the recompete risk? This year you only have 3% left. Yeah. How do we think about 2025 and 2026 again? Yeah, I'd say in a normal year, you see about 10% of revenue from recompetes. That's kind of a normal run rate for us and most of our peers, I would say. When we look at next year, we're at 10% last quarter. We expect by the end of the year it'll be below that, so we could probably think 6%-7% by the end of the year for 2025. So very little deduction, but that $7 billion kind of converts- Work out for recompete, yeah. Um- Yeah, I would, I would add to that, you know, we were very fortunate. We have four programs that were over $2 billion, and we secured each of those recompetes, and those are secured for the next seven to twenty years. I think one of the things that's a distinction with Parsons, whether it's your revenue growth or your LinkedIn page is the way you treat your employees, and clearly, that manifests itself in the growth that you have. How do you think about investing in your employees, whether it's hiring, recruiting, and the attrition you're seeing in the market? Yeah, so we've been very successful in both hiring as well as retention. Obviously, that's what's driven our greater than 20% organic growth over the last five quarters. I think we're a different type of company, which we're very proud of. We are we have capabilities like a large business, but yet we operate with agility and innovation of a small business. So what that enables us to do is get operationally relevant solutions to our customers very quickly. Employees come to Parsons because of the mission and the opportunities, as well as the culture of Parsons. And once they come there, we like to call them destination employees because they stay. We've put in place some great initiatives, such as a chief technology officer organization, where the CTO sits at the executive leadership team, and we have one at each of the four business units. We have a dual technical career path. As a master's in electrical engineering, the one thing I don't wanna do is lose great engineers that feel like they have to go in management to be able to move up the career ladder. So we put in place a mechanism where these great technical people can stay. We also put in place a technical fellows program, which are kind of the best of the best across the company, so I would say also, success breeds success. We have been winning a lot of work. We're winning these exciting projects in both federal and critical infrastructure, and people are really anxious to come to Parsons and have the opportunity to deliver on these opportunities. Yeah, Sheila, I'd probably add to that, and Carey was in Hawaii last week, but, you know, the, we have so many employees that are attached to the mission, so winning some of these early-on programs, you know, research and development type programs, folks want to be involved in the next mission, I would say. Great. And in terms of maybe just to talk about profitability, you know, starting on profitability, from a total company level, you target twenty to thirty basis points of annual margin expansion. Help us understand the operating leverage dynamics, any contract mix that you'd call out over this year or next year, especially with the win rates you see. Yeah, so I'll take that one, Sheila, and Carey can add in, but I would say really in great shape this year. Year to date, we're north of 9%, or we're at 8.9% midpoint on guide. Company's been performing quite well. Our federal business specifically, you know, Carey and I, a year ago, would have told you that kinda low to mid-nines was a good position for us to be. If you think about the structure of the federal work that we do, a lot of it is kind of front end and kinda new work, so you want to be in a cost type, and then with cost type, you're kinda structurally limited from a margin expansion perspective. But what we've seen is a little bit of a mix shift, a little bit more on the fixed price side. So through the first two quarters, Federal was over 10% both quarters. Carey and I are still thinking kinda high 9s is a good place. We've talked a little bit about that GSA FEDSIM win, so there's $200 million worth of growth that'll come from cost type over the next 12 to 18 months. But you know, I'd say Federal is in a great place. We really see opportunities within the Infrastructure business. Infrastructure's kinda low- to mid-sevens right now. If you think about. You know, if we normalize for. We've talked about some challenge programs that we had, and so when you normalize for the headwind from those programs, from a margin perspective, the Infrastructure business is also running kinda high 9s, low 10s, through Q1 and Q2. So the underlying performance is there. The contracts that we've won are accretive to the company, and infrastructure is, you know, trending toward that double digits. So as a overall company, 20-30 basis points per year, with the majority of it coming from critical infrastructure, so think 40-60 basis points per year from the low sevens will get us, trend us toward double digits over the next few years. Yeah, just a couple of adds there. I would say, so at the Parsons level, we have about 63% fixed price, time and material, and 37% that is reimbursable. To Matt's point, the opportunity, we have 71% fixed price, time, and material within the infrastructure business, so that's where we expect the delivery. Federal has about 58% fixed price, time, and material. A lot of levers that we're pulling, one is demand is greater than supply. So I already mentioned that we really compete on technical capabilities, so the work that we're bidding, we're able to get higher margins. We've held our SG&A as our revenues increase, so we were at 13.4% SG&A as a percent of revenue, and that's down from over 16% just a year ago, and 18% the year before that. Our acquisitions are accretive, so we're buying companies at greater than 10% EBITDA margin. And maybe just on that point, in terms of fixed-price, you know, you've disclosed better profitability this year, mostly due to better fixed-price mix. And I think you've talked about fixed-price having four hundred basis points of better profitability, but I might be putting numbers in your mouth, Matt, so let me know if I'm wrong. Does that normalize, or do we kinda continue that trajectory, and there's no dilution from the new, the new work? Yeah, I would say, again, the mix. I think the mix shift is probably about appropriate right now, given, you know, the amount of fixed price work that we've won within the federal business. As I mentioned, a fair amount of growth is gonna come from cost type, given the kinda demands on the customer set. So I think the current mix is a reasonable number, and you're right, Sheila, the fixed price is, you know, about a couple points ahead, so yeah. So we could reach double-digit margins as we think about the next few years, but no stated deadline on that? Yeah, Carey and I's long-term goal is to get to double digits. It's kind of the slope at which we get there. We're coming out from, you know, I think Carey's talked about legacy programs. We wrapped one up in late Q1. We've got the second one wrapping up in late Q3, call it end of September, early October, so before our next earnings call. So hopefully we'll have those two behind us, and then we've got another contract that we've worked through some supply chain challenges. Hopefully, we'll have that kinda behind us by the end of the year as well. So again, the underlying normalized business is running kinda toward double digits, so that's Carey and I's long-term goal. And I wanna leave a few minutes on your M&A strategy 'cause it's been really critical. It seems like Carey has friends that have great businesses that you continue to buy. So maybe if you could talk about your M&A strategy, what are the hurdles to acquiring an asset? Yes, when we look at M&A, we're looking at greater than 10% top-line growth companies and greater than 10% EBITDA. We are buying in both segments, federal as well as critical infrastructure. On the federal side, we're gonna stay laser-focused on outpacing near-peer threats, areas that matter that include cyberspace, intelligence, missile defense, and electronic warfare, BlackSignal being a great example of that. Within critical infrastructure, we're focused on digital transformation. We believe we're one of the companies leading the digital transformation of critical infrastructure, so continuing to acquire there, as well as looking at our top tier one states, which we would call Texas, Florida, California, New York, and New Jersey. You can expect to see us do two to three acquisitions this year. We've obviously played BlackSignal so far, and likewise, as we head into next year. We have bought, over the last five years, eleven companies, and for almost every year, we've bought one company that's greater than $200 million. Maybe in terms of the specific deals, you know, Xator, BlackSignal, Sealing Technologies, each of them have brought an end-market capability. Can you touch upon, like, how you think about the revenues of these businesses and how they've performed over the last year since you've acquired them? Yes. So I would say all of them we're very happy with, and it goes back to our thesis. Cyber has been a key focus area for us. Black Signal, as well as Sealing Tech, brought cyber. Sealing Tech also brought defensive cyber operations, whereas Black Signal helped us double down in offensive cyber operations. Black Signal also brought the electronic warfare capability, signals intelligence, EW and counter space capability, very complementary to the capabilities we have within Parsons. Xator, I'd say, was also a game changer. Xator has really delivered for us. It gave us an entrée into the Department of State, where we now have a customer that we can not just sell Xator capabilities, but we can sell all the Parsons capabilities. One thing we did when we acquired Xator, we took our, like, markets, such as we both did electronics systems, security systems. We also both had counter unmanned aircraft systems, and we both had biometrics. We actually took the Parsons portfolio, we put it under the Xator leadership. We felt that they were stronger. That did two things: It retained the founder, it retained the people, and it also helped us faster grow. Last one on M&A. How do you think about capital deployment priorities from here, given your leverage is at one times or lower, depending on how much cash you have today on the balance sheet, and how active is the market? Yeah, so our current leverage is at 1.3. Pro forma with BlackSignal, it'd be around a 1.6 to a 1.7. So we're gonna continue to focus on M&A. That has really driven Parsons' growth. When you look at our ability to move up the value chain, differentiate as a solutions integrator through software and advanced technology, be able to bid and win larger jobs, 15 greater than $100 million last year, over 11 greater than $100 million the year prior, M&A has really been a differentiator for the company, putting together those full spectrum capabilities.